----

----

| (Mark                One)                       |                                                                                                                                        |
|-------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|
|                                                 |                                                                                                                                        |
| x                                               | Quarterly                Report Pursuant to Section 13 or 15(d) of the Securities Exchange                Act of                1934   |
|                                                 |                                                                                                                                   |
|                                                 | For                the Quarterly Period Ended January 31, 2008                                                                         |
|                                                 |                                                                                                                    |
|                                                 |  Or                                                                                                                               |
|                                                 |                                                                                                                         |
| o                                               | Transition                Report Pursuant to Section 13 or 15(d) of the Exchange                Act                                    |
|                                                 |                                                                                                                    |
|                                                 | For                the Transition Period from                     to                    . |
|                                                 |                                                                                                                                   |
| Commission                File Number 000-21812 |

|       Nevada                                                                                 |  |   52-2352724       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--|------------------------------------------------------------|
| (State                of Incorporation)                                                                                                             |  | (I.R.S.                Identification Number)              |
|                                                                                                                                                |  |                                                       |
| 172                Starlite Street, South San Francisco, CA                94080                                                                    |  | 650-588-0425                                               |
| (Address                of principal executive office)                                                                                              |  | (Telephone)                                                |
|                                                                                                                                                |  |                                                       |
|             N/A             |
| (Former                name, address, and fiscal year,if                changed since last report)                                                  |
|                                                                                                                                                |

----

----

----

|                                                                                                                        |   | January                31, |        |   | October                31, |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|-------------|--------|----------------------------|--------|
| ASSETS                                                                                                                      |   | 2008                       |        |   | 2007                       |   |
| Current                Assets:                                                                                              |   |                       |        |   |                       |   |
|      Cash                                                                                          |   | $                          | 30,816      |   |                       | $      | 33,688 |   |
| Total                Current Assets                                                                                         |   |                       | 30,816      |   |                       |   | 33,688 |   |
| Fixed                Assets:                                                                                                |   |                       |        |   |                       |   |   |   |
|      Office                furniture & equipment                                               |   |                       | 1,408       |   |                       |   | - |   |
|      Plant                equipment                                                                |   |                       | 19,911      |   |                       |   | 4,700 |   |
|      Accumulated                depreciation                                                       |   |                       | (886        | )      |                       |   | (235 | ) |
| Total                Fixed Assets                                                                                           |   |                       | 20,433      |   |                       |   | 4,465 |   |
|                                                                                                                        |   |                       |        |   |                       |   |   |   |
| Other                Assets:                                                                                                |   |                       |        |   |                       |   |   |   |
|      Reclamation                bond- net of estimated reclamation costs                           |   |                       | 19,867      |   |                       |   | 19,867 |   |
|      Water                Rights                                                                   |   |                       | 6,250       |   |                       |   | 6,250 |   |
|                Total                Other Assets |   |                       | 26,117      |   |                       |   | 26,117 |   |
|                                                                                                                        |   |                       |        |   |                       |   |   |   |
| Total                Assets                                                                                                 |   | $                          | 77,366      |   |                       | $      | 64,270 |   |
|                                                                                                                        |   |                       |        |   |                       |   |   |   |
| LIABILITIES                & SHAREHOLDERS' EQUITY                                                                       |   |                       |        |   |                       |   |   |   |
|                                                                                                                        |   |                       |        |   |                       |   |   |   |
| Current                Liabilities:                                                                                         |   |                       |        |   |                       |   |   |   |
|      Accounts                payable and accrued liabilities                                       |   | $                          | 12,697      |   |                       | $      | 17,715 |   |
|      Deferred                Gain on Sale of Equipment                                             |   |                       | 8,550       |   |                       |   | 11,400 |   |
|      Advances                from Stockholders'                                                    |   |                       | 292,558     |   |                       |   | 210,808 |   |
| Total                Current Liabilities                                                                                    |   |                       | 313,805     |   |                       |   | 239,923 |   |
|                                                                                                                        |   |                       |        |   |                       |   |   |   |
| Total                Liabilities                                                                                            |   |                       | 313,805     |   |                       |   | 239,923 |   |
|                                                                                                                        |   |                       |        |   |                       |   |   |   |
| Stockholders'                Equity:                                                                                        |   |                       |        |   |                       |   |   |   |
|      Preferred                Stock, $.001 par value; authorized 5,000,000 shares;                 |   |                       |        |   |                       |   |   |   |
|          no                preferred shares outstanding                        |   |                       | -           |   |                       |   | - |   |
|      Common                Stock, $.001 par value; authorized 45,000,000 shares;                   |   |                       |        |   |                       |   |   |   |
|          18,037,745                issued and outstanding at October 31, 2007; |   |                       |        |   |                       |   |   |   |
|          17,737,745                issued and outstanding at October 31, 2006  |   |                       | 18,034      |   |                       |   | 18,034 |   |
|      Additional                Paid-In Capital                                                     |   |                       | 32,130,525  |   |                       |   | 32,129,025 |   |
|      Cummulative                effect of correction of error                                      |   |                       | 345,825     |   |                       |   | 345,825 |   |
|      Accumulated                Deficit                                                            |   |                       | (32,730,823 | )      |                       |   | (32,668,537 | ) |
| Total                Stockholders' Equity                                                                                   |   |                       | (236,439    | )      |                       |   | (175,653 | ) |
|                                                                                                                        |   |                       |        |   |                       |   |   |   |
| Total                Liabilities and Stockholders' Equity                                                                   |   | $                          | 77,366      |   |                       | $      | 64,270 |   |
|                                                                                                                        |   |                       |        |   |                       |   |   |   |
|                                                                                                                        |   |                       |        |   |                       |   |   |   |
| See                accompanying notes to the financial statements                                                           |   |

----

|                                                                                       |   |                            |       |   |                            |   |       |                          |   |
|--------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|---------------------------------|--------|------------|-------------------------------|--------|
|                                                                                       |   |                            |       |   |                            |   |       |                          |   |
|                                                                                       |   |                            |       |   |                            |   |       |                          |   |
|                                                                                       |   |                            |       |   |                            |   |       | Cumulative                    |   |
|                                                                                       |   |                            |       |   |                            |   |       | From                Date of   |   |
|                                                                                       |   |                            |       |   |                            |   |       | Inception                on   |   |
|                                                                                       |   |                            |       |   | (Restated)                      |   |       | May                23, 1986   |   |
|                                                                                       |   | 3                months ended   |       |   | 3                months ended   |   |       | to                January 31, |   |
|                                                                                       |   | January                31, 2008 |       |   | January                31, 2007 |   |       | 2008                          |   |
|                                                                                       |   |                            |       |   |                            |   |       |                          |   |
| Revenues                                                                                   |   |                            |       |   |                            |   |       |                          |   |
|      Mineral                processing fees                       |   | $                               | -          |   |                            | $      | -          |                          |   | $ | 4,585 |   |
| Total                Revenue                                                               |   |                            | -          |   |                            |   | -          |                          |   |   | 4,585 |   |
| Expenses:                                                                                  |   |                            |       |   |                            |   |       |                          |   |   |   |   |
|      Mineral                exploration costs                     |   |                            | 36,227     |   |                            |   | 40,047     |                          |   |   | 16,563,079 |   |
|      Depreciation/amortization                expenses            |   |                            | 651        |   |                            |   | -          |                          |   |   | 3,721,365 |   |
|      General                and administrative                    |   |                            | 28,258     |   |                            |   | 66,132     |                          |   |   | 11,320,880 |   |
|      Impairment                of patents and                     |   |                            |       |   |                            |   |       |                          |   |   |   |   |
|          Intellectual                property |   |                            | -          |   |                            |   | -          |                          |   |   | 1,162,792 |   |
| Total                Expenses                                                              |   |                            | 65,136     |   |                            |   | 106,179    |                          |   |   | 32,768,116 |   |
| Other                Income:                                                               |   |                            |       |   |                            |   |       |                          |   |   |   |   |
|      Gain                of sale of equipment                     |   |                            | 2,850      |   |                            |   | 2,631      |                          |   |   | 12,497 |   |
|      Precious                Metal Sales                          |   |                            | -          |   |                            |   | -          |                          |   |   | 26,211 |   |
|                                                                                       |   |                            |       |   |                            |   |       |                          |   |   |   |   |
| Net                Loss                                                                    |   | $                               | (62,286    | )      |                            | $      | (103,548   | )                             |   | $ | (32,724,823 | ) |
| Weighted                Average Shares                                                     |   |                            |       |   |                            |   |       |                          |   |   |   |   |
|    Common                Stock Outstanding                                  |   |                            | 18,037,745 |   |                            |   | 17,737,745 |                          |   |   |   |   |
| Net                Loss Per Common Share                                                   |   |                            |       |   |                            |   |       |                          |   |   |   |   |
|    (Basic                and Fully Diluted)                                 |   | $                               | (0.00      | )      |                            | $      | (0.01      | )                             |   |   |   |   |
|                                                                                       |   |                            |       |   |                            |   |       |                          |   |   |   |   |
|                                                                                       |   |                            |       |   |                            |   |       |                          |   |   |   |   |
| See                accompanying notes to the financial statements                          |   |

----

| FRANKLIN                LAKE RESOURCES, INC.                                          |   |
|---------------------------------------------------------------------------------------|--------|
| (An                Exploration Stage Company)                                         |   |
| Statement                of Stockholders’ Equity (Deficiency)                   |   |
| from                  Inception May 23, 1986 to January 31, 2008            |   |
| (Unaudited)                                                                           |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                  |   | Common |   |   | Common |   |   |   |   |   | (Restated) |   |   | (Restated) |   |
|                                                                                  |   | Stock |   |   | Stock |   |   | Paid-In |   |   | Accumulated |   |   | Total |   |
|                                                                                       |   | Shares |   |   | Amount |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                                  |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| May                1986 common stock issued                                           |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Net                Loss from inception to October 31, 1986                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (7,379 | ) |   |   | (7,379 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss for the year ended October 31, 1987                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (49,050 | ) |   |   | (49,050 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1988 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $.50 per share                                             |   |   | 15,000 |   |   |   | 15 |   |   |   | 7,455 |   |   |   | - |   |   |   | 7,470 |   |
| Net                Loss for the year ended October 31, 1988                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (17,156 | ) |   |   | (17,156 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1989 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $1.65 per share                                            |   |   | 187,633 |   |   |   | 188 |   |   |   | 308,553 |   |   |   | - |   |   |   | 308,741 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1989 common stock issued for                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| mineral                property; $1.15 per share                                      |   |   | 30,000 |   |   |   | 30 |   |   |   | 34,395 |   |   |   | - |   |   |   | 34,425 |   |
| Net                Loss for the year ended October 31, 1989                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (210,686 | ) |   |   | (210,686 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1990 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $5.48 per share                                            |   |   | 194,726 |   |   |   | 195 |   |   |   | 1,066,635 |   |   |   | - |   |   |   | 1,066,830 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1990 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                mineral property; $1.16 per share                                  |   |   | 40,000 |   |   |   | 40 |   |   |   | 46,400 |   |   |   | - |   |   |   | 46,440 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1990 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                services at $30.54 per share                                       |   |   | 2,401 |   |   |   | 2 |   |   |   | 73,313 |   |   |   | - |   |   |   | 73,315 |   |
| Net                Loss for the year ended October 31, 1990                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,372,808 | ) |   |   | (2,372,808 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1991 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $3.60 per share                                            |   |   | 275,903 |   |   |   | 276 |   |   |   | 994,700 |   |   |   | - |   |   |   | 994,976 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1991 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                mineral property; $9.16 per share                                  |   |   | 16,500 |   |   |   | 17 |   |   |   | 151,059 |   |   |   | - |   |   |   | 151,076 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1991 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                debt payment at $4.04 per share                                    |   |   | 78,924 |   |   |   | 79 |   |   |   | 318,691 |   |   |   | - |   |   |   | 318,770 |   |
| Net                Loss for the year ended October 31, 1991                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (578,573 | ) |   |   | (578,573 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1992 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $5.09 per share                                            |   |   | 195,864 |   |   |   | 196 |   |   |   | 996,469 |   |   |   | - |   |   |   | 996,665 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1992 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                mineral property; $6.96 per share                                  |   |   | 87,648 |   |   |   | 88 |   |   |   | 610,381 |   |   |   | - |   |   |   | 610,469 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1992 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                license at $3.40 per share                                         |   |   | 40,000 |   |   |   | 40 |   |   |   | 136,040 |   |   |   | - |   |   |   | 136,080 |   |
| Net                Loss for the year ended October 31, 1992                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,153,009 | ) |   |   | (1,153,009 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1993 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                subsidiary at $9.04 per share                                      |   |   | 276,741 |   |   |   | 276 |   |   |   | 2,221,550 |   |   |   | - |   |   |   | 2,221,826 |   |
| Net                Loss for the year ended October 31, 1993                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,430,936 | ) |   |   | (1,430,936 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1994 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $10.65 per share                                           |   |   | 339,400 |   |   |   | 339 |   |   |   | 3,613,155 |   |   |   | - |   |   |   | 3,613,494 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1994 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                subsidiary at $25.90 per share                                     |   |   | 2,500 |   |   |   | 3 |   |   |   | 64,747 |   |   |   | - |   |   |   | 64,750 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1994 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                director at $8.32 per share                                        |   |   | 25,000 |   |   |   | 25 |   |   |   | 208,100 |   |   |   | - |   |   |   | 208,125 |   |
| Net                Loss for the year ended October 31, 1994                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,435,290 | ) |   |   | (2,435,290 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1995 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $14.30 per share                                           |   |   | 208,359 |   |   |   | 208 |   |   |   | 2,979,872 |   |   |   | - |   |   |   | 2,980,080 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1995 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                mineral property; $15.40 per share                                 |   |   | 23,100 |   |   |   | 23 |   |   |   | 355,642 |   |   |   | - |   |   |   | 355,665 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1995 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                equipment at $16.58 per share                                      |   |   | 1,800 |   |   |   | 2 |   |   |   | 29,833 |   |   |   | - |   |   |   | 29,835 |   |
| Net                Loss for the year ended October 31, 1995                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,706,126 | ) |   |   | (2,706,126 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1996 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $14.23 per share                                           |   |   | 316,024 |   |   |   | 316 |   |   |   | 4,496,619 |   |   |   | - |   |   |   | 4,496,935 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1996 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                equipment at $40.94 per share                                      |   |   | 30,970 |   |   |   | 31 |   |   |   | 1,267,852 |   |   |   | - |   |   |   | 1,267,883 |   |
| Net                Loss for the year ended October 31, 1996                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (3,898,191 | ) |   |   | (3,898,191 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1997 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $16.13 per share                                           |   |   | 270,608 |   |   |   | 271 |   |   |   | 4,365,253 |   |   |   | - |   |   |   | 4,365,524 |   |
| Net                Loss for the year ended October 31, 1997                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (5,255,324 | ) |   |   | (5,255,324 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1998 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $18.28 per share                                           |   |   | 198,928 |   |   |   | 199 |   |   |   | 3,636,543 |   |   |   | - |   |   |   | 3,636,742 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1998 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| pursuant                to an anti-dulition agreement                                 |   |   | 24,444 |   |   |   | 24 |   |   |   | -24 |   |   |   | - |   |   |   | - |   |
| Net                Loss for the year ended October 31, 1998                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (5,966,623 | ) |   |   | (5,966,623 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                1999 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $5.44 per share                                            |   |   | 24,060 |   |   |   | 24 |   |   |   | 130,879 |   |   |   | - |   |   |   | 130,903 |   |
| Net                Loss for the year ended October 31, 1999                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,623,785 | ) |   |   | (1,623,785 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                2000 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $.65 per share                                             |   |   | 375,800 |   |   |   | 376 |   |   |   | 245,164 |   |   |   | - |   |   |   | 245,540 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                2000 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                payables at $.97 per share                                         |   |   | 55,000 |   |   |   | 55 |   |   |   | 53,136 |   |   |   | - |   |   |   | 53,191 |   |
| Net                Loss for the year ended October 31, 2000                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (785,920 | ) |   |   | (785,920 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                2001 capital contribution                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                shares previously paid for                                         |   |   | - |   |   |   | - |   |   |   | 17,531 |   |   |   | - |   |   |   | 17,531 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal                2001 common stock issued                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                debt at $.82 per share                                             |   |   | 47,500 |   |   |   | 48 |   |   |   | 38,986 |   |   |   | - |   |   |   | 39,034 |   |
| Net                Loss for the year ended October 31, 2001                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (320,797 | ) |   |   | (320,797 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January                17, 2002; common stock issued for loans                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| advanced                in 2001of $100,000 and cash of $50,000 in                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2002                at $.25 per share                                                 |   |   | 600,000 |   |   |   | 600 |   |   |   | 149,400 |   |   |   | - |   |   |   | 150,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| February                27, 2002; common stock issued                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $.25 per share                                             |   |   | 120,000 |   |   |   | 120 |   |   |   | 29,880 |   |   |   | - |   |   |   | 30,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March                15, 2002; common stock issued for                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation,                rent expenses and cash advances valued at $.25 per share |   |   | 2,000,000 |   |   |   | 2,000 |   |   |   | 498,000 |   |   |   | - |   |   |   | 500,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March                23, 2002; common stock issued                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $.25 per share                                             |   |   | 400,000 |   |   |   | 400 |   |   |   | 99,600 |   |   |   | - |   |   |   | 100,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March                25, 2002; common stock                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                payables at $ .64 per share                                        |   |   | 2,000 |   |   |   | 2 |   |   |   | 1,270 |   |   |   | - |   |   |   | 1,272 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| April                8, 2002; common stock issued in connection with                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Xenolix                Asset Acquisition; valued at $1.08 per share                   |   |   | 1,201,657 |   |   |   | 1,201 |   |   |   | 1,296,589 |   |   |   | - |   |   |   | 1,297,790 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| April                8, 2002; common stock issued in connection with                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Lounsbury                claims consolidation valued at $.63 per share                |   |   | 102,500 |   |   |   | 102 |   |   |   | 64,473 |   |   |   | - |   |   |   | 64,575 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| September                9, 2002; common stock issued                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $.25 per share                                             |   |   | 80,000 |   |   |   | 80 |   |   |   | 19,920 |   |   |   | - |   |   |   | 20,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss for the year ended October 31, 2002                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,782,473 | ) |   |   | (1,782,473 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| November                1, 2002, commons stock issued                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $ .35 per share                                            |   |   | 857,143 |   |   |   | 857 |   |   |   | 299,143 |   |   |   | - |   |   |   | 300,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January                22, 2003 exercise of warrants                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| at                $.25 per share                                                      |   |   | 200,000 |   |   |   | 200 |   |   |   | 49,800 |   |   |   | - |   |   |   | 50,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March                26, 2003 common stock issued                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                cash at $.35 per share                                             |   |   | 71,429 |   |   |   | 71 |   |   |   | 24,929 |   |   |   | - |   |   |   | 25,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Loss for the year ended October 31, 2003                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (349,781 | ) |   |   | (349,781 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cancellation                of common stock to Xenetix                                |   |   | (601,657 | ) |   |   | (602 | ) |   |   | 602 |   |   |   | - |   |   |   | - |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| July                20, 2004 common stock issued for cash                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| at                $.10 per share                                                      |   |   | 250,000 |   |   |   | 250 |   |   |   | 24,750 |   |   |   | - |   |   |   | - |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| July                20, 2004 common stock issued for                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation,                rent and cash advance                                    |   |   | 1,751,570 |   |   |   | 1,752 |   |   |   | 173,405 |   |   |   | - |   |   |   | 175,157 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| October                29, 2004 common stock issued for                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation,                rent and cash advance at $.10 per share                  |   |   | 1,130,000 |   |   |   | 1,130 |   |   |   | 11,870 |   |   |   | - |   |   |   | - |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                (loss) for year                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (345,424 | ) |   |   | (345,424 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Jauary                31, 2005 common stck issued for                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| cash                at $.10 per share                                                 |   |   | 750,000 |   |   |   | 750 |   |   |   | 74,250 |   |   |   | - |   |   |   | 75,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January                31, 2005 common stock issued for                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation                and rent                                                  |   |   | 217,500 |   |   |   | 218 |   |   |   | 21,532 |   |   |   | - |   |   |   | 21,750 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| April                30, 2005 common stock issued for cash                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| at                $.10 per share                                                      |   |   | 250,000 |   |   |   | 250 |   |   |   | 24,750 |   |   |   | - |   |   |   | 25,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| April                30, 2005 common stock issued for                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation                and rent                                                  |   |   | 217,500 |   |   |   | 217 |   |   |   | 21,533 |   |   |   | - |   |   |   | 21,750 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| July                31, 2005 common stock issued for                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| cash                at $.10 per share                                                 |   |   | 50,000 |   |   |   | 500 |   |   |   | 49,500 |   |   |   | - |   |   |   | 50,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| July                31, 2005 common stock issued for                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation                and rent at $.10 per share                                |   |   | 217,500 |   |   |   | 218 |   |   |   | 21,532 |   |   |   | - |   |   |   | 21,750 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| October                31, 2005 common stock issued for                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| cash                at $.10 per share                                                 |   |   | 620,000 |   |   |   | 620 |   |   |   | 61,380 |   |   |   | - |   |   |   | 62,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| October                31, 2005 common stock issued for                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| compensation                and rent at $.10 per share                                |   |   | 217,500 |   |   |   | 217 |   |   |   | 21,533 |   |   |   | - |   |   |   | 21,750 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                (loss) for period                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (329,330 | ) |   |   |   |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January                31, 2006 common stock issued for                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| cash                at $.10 per share                                                 |   |   | 602,000 |   |   |   | 602 |   |   |   | 59,598 |   |   |   |   |   |   | $ | 60,200 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January                31, 2006 common stock issued for                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| services                at $.10 per share                                             |   |   | 217,500 |   |   |   | 218 |   |   |   | 21,532 |   |   |   |   |   |   | $ | 21,750 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| April                30, 2006 common stock issued for                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| cash                at $ .10 per share                                                |   |   | 910,000 |   |   |   | 910 |   |   | $ | 90,090 |   |   |   |   |   |   | $ | 91,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| April                30, 2006 common stock issued for                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| services                at $.10 per share                                             |   |   | 217,500 |   |   |   | 218 |   |   | $ | 21,532 |   |   |   |   |   |   | $ | 21,750 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| July                31, 2006 common stock issued for                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| services                at $.10 per share                                             |   |   | 217,500 |   |   |   | 218 |   |   | $ | 21,532 |   |   |   |   |   |   | $ | 21,750 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| October                25, 2006 common stock issued for                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| cash                at $.13 per share                                                 |   |   | 230,770 |   |   |   | 230 |   |   | $ | 29,770 |   |   |   |   |   |   | $ | 30,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| October                31, 2006 common stock issued for                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| cash                at $.10 per share                                                 |   |   | 318,000 |   |   |   | 318 |   |   | $ | 31,482 |   |   |   |   |   |   | $ | 31,800 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| October                31, 2006 common stock issued for                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| services                at $.10 per share                                             |   |   | 217,500 |   |   |   | 217 |   |   |   | 21,533 |   |   |   |   |   |   |   | 21,750 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital                contrbuted by officer                                          |   |   |   |   |   |   |   |   |   | $ | 1,000 |   |   |   |   |   |   |   | 1,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                (loss) for period                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (338,299 | ) |   |   | (337,299 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| April                30, 2007 common stock                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| cash                at $.10 per share                                                 |   |   | 200,000 |   |   |   | 200 |   |   | $ | 19,800 |   |   |   |   |   |   | $ | 20,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| April                30, 2007 common stock                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| cash                at $.25 per share                                                 |   |   | 100,000 |   |   |   | 100 |   |   | $ | 24,900 |   |   |   |   |   |   | $ | 25,000 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                (loss) for period                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (385,323 | ) |   |   | (385,323 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances                at January 31, 2008                                           |   |   | 18,034,745 |   |   |   | 18,034 |   |   |   | 32,130,525 |   |   |   | (32,730,823 | )              ) |   |   | (236,439 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to the financial statements                     |   |

----

| FRANKLIN                LAKE RESOURCES, INC.  |
|-----------------------------------------------|
| (An                Exploration Stage Company) |
| Statements                of Cash Flows       |
| (Unaudited)                                   |

|                                                                                                                                                                               |   |                                           |    |   | (Restated)                                     |   |     | Cumulative                                                                               |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|---------|--------|------------------------------------------------|--------|----------|------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                               |   | 3                Months Ended January 31, 2008 |    |   | 3                Months Ended January 31, 2007 |   |     | From                date of inception on May 23, 1986 to January                31, 2008 |   |
| Cash                Flows used in Operating Activities:                                                                                                                            |   |                                           |    |   |                                           |   |     |                                                                                     |   |
| Net                Loss                                                                                                                                                            |   | $                                              | (62,286 | )      |                                           | $      | (103,548 | )                                                                                        |   | $ | (32,724,823 | ) |
| Adjustments                to reconcile net loss to net cash provided by operations                                                                                                |   |                                           |    |   |                                           |   |     |                                                                                     |   |   |   |   |
|      Amortization                / depreciation                                                                                                           |   |                                           | 651     |   |                                           |   | -        |                                                                                     |   |   | 3,721,130 |   |
|      Proceeds-                net book value of equipment licenses,                                                                                       |   |                                           |    |   |                                           |   |     |                                                                                     |   |   |   |   |
|           properties                sold/ abandoned                                                                              |   |                                           | -       |   |                                           |   | -        |                                                                                     |   |   | 2,621,265 |   |
|      Gain                on sale of plant equipment                                                                                                       |   |                                           | (2,850  | )      |                                           |   | (2,631   | )                                                                                        |   |   | (12,497 | ) |
|      Impairment                of patents and intellectual property                                                                                       |   |                                           | -       |   |                                           |   | -        |                                                                                     |   |   | 1,162,792 |   |
|      Rent                contributed to capital                                                                                                           |   |                                           | 1,500   |   |                                           |   | -        |                                                                                     |   |   | 1,500 |   |
|      Compensation                expense from warrants issued                                                                                             |   |                                           | -       |   |                                           |   | 38,784   |                                                                                     |   |   | 437,055 |   |
|      Contribution                of capital for services                                                                                                  |   |                                           |    |   |                                           |   |     |                                                                                     |   |   | 6,000 |   |
|      Common                stock issued for compensation, rent and expenses                                                                               |   |                                           | -       |   |                                           |   | 21,750   |                                                                                     |   |   | 833,823 |   |
| Changes                in Operating Assets and Liabilities:                                                                                                                        |   |                                           |    |   |                                           |   |     |                                                                                     |   |   |   |   |
|     (Increase)                decrease in prepaid expenses and other                                                                                           |   |                                           | -       |   |                                           |   | -        |                                                                                     |   |   | - |   |
|     (Increase)                decrease in advances from officer/shareholder                                                                                    |   |                                           | 21,750  |   |                                           |   |     |                                                                                     |   |   | 108,750 |   |
|     Increase                (refund) of reclamation bond outstanding                                                                                           |   |                                           | -       |   |                                           |   | -        |                                                                                     |   |   | (19,867 | ) |
|     Increase                ( decrease)  in accounts payable and accrued                liabilities                                                  |   |                                           | (5,018  | )      |                                           |   | (187     | )                                                                                        |   |   | (5,513 | ) |
|                    Cash                Flows used in Operating Activities           |   |                                           | (46,253 | )      |                                           |   | (45,832  | )                                                                                        |   |   | (23,870,385 | ) |
| Cash                Flows from Investing Activities:                                                                                                                               |   |                                           |    |   |                                           |   |     |                                                                                     |   |   |   |   |
|      Purchases                of plant & equipment                                                                                                    |   |                                           | (16,619 | )      |                                           |   | -        |                                                                                     |   |   | (901,398 | ) |
|      Sale                of plant equipment                                                                                                               |   |                                           |    |   |                                           |   | -        |                                                                                     |   |   | 50,000 |   |
|      Disposal                (Acquisition) of water rights                                                                                                |   |                                           |    |   |                                           |   | -        |                                                                                     |   |   | 12,500 |   |
|      Acquisition                of mineral properties                                                                                                     |   |                                           | -       |   |                                           |   | -        |                                                                                     |   |   | (2,152,077 | ) |
|                     Cash                Flows Provided by Investing Activities |   |                                           | (16,619 | )      |                                           |   | -        |                                                                                     |   |   | (2,990,975 | ) |
| Cash                Flows from Financing Activities:                                                                                                                               |   |                                           |    |   |                                           |   |     |                                                                                     |   |   |   |   |
|      Common                stock issued for cash                                                                                                          |   |                                           | -       |   |                                           |   | -        |                                                                                     |   |   | 23,991,611 |   |
|      Loan                proceeds                                                                                                                         |   |                                           | -       |   |                                           |   | -        |                                                                                     |   |   | 2,202,407 |   |
|      Common                stock issued for exercise of warrants                                                                                          |   |                                           |    |   |                                           |   |     |                                                                                     |   |   | 20,000 |   |
|      Advances                (repayments) from  officers/directors/affiliates                                                                   |   |                                           | 60,000  |   |                                           |   | 20,000   |                                                                                     |   |   | 678,158 |   |
|                     Cash                Flows from Financing Activities        |   |                                           | 60,000  |   |                                           |   | 20,000   |                                                                                     |   |   | 26,892,176 |   |
|   Net                Increase (Decrease) in Cash                                                                                                                         |   |                                           | (2,872  | )      |                                           |   | (25,832  | )                                                                                        |   |   | 30,816 |   |
|   Cash                at Beginning of Period                                                                                                                             |   |                                           | 33,688  |   |                                           |   | 35,942   |                                                                                     |   |   | - |   |
| Cash                at End of Period                                                                                                                                               |   | $                                              | 30,816  |   |                                           | $      | 10,110   |                                                                                     |   | $ | 30,816 |   |
|                                                                                                                                                                               |   |                                           |    |   |                                           |   |     |                                                                                     |   |   |   |   |
|                                                                                                                                                                               |   |                                           |    |   |                                           |   |     |                                                                                     |   |   |   |   |
| See                accompanying notes to the financial statements                                                                                                                  |   |

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| FRANKLIN                LAKE RESOURCES, INC.        |
|-----------------------------------------------------|
| (An                Exploration Stage Company)       |
| Statements                of Cash Flows - Continued |
| (Unaudited)                                         |

|                                                                                    |   |                                       |   |   |                                       |   |   | Cumulative                                                                               |   |
|-----------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|--------|--------------------------------------------|--------|--------|------------------------------------------------------------------------------------------|--------|
|                                                                                    |   | Year                Ended October 31, 2007 |   |   | Year                Ended October 31, 2006 |   |   | From                date of inception on May 23, 1986 to October                31, 2007 |   |
|                                                                                    |   |                                       |   |   |                                       |   |   |                                                                                     |   |
|                                                                                    |   |                                       |   |   |                                       |   |   |                                                                                     |   |
| Supplemental                Non-Cash Financing Activities:                              |   |                                       |   |   |                                       |   |   |                                                                                     |   |
| Common                Stock issued for compensation and rent                            |   | $                                          | 65,250 |   |                                       | $      | 87,000 |                                                                                     |   | $ | 994,965 |   |
|                                                                                    |   |                                       |   |   |                                       |   |   |                                                                                     |   |   |   |   |
|      Common                Stock issued for licenses           |   |                                       |   |   |                                       |   |   |                                                                                     |   |   | 136,080 |   |
|      Common                Stock issued for subsidiary         |   |                                       |   |   |                                       |   |   |                                                                                     |   |   |   |   |
|   acquisition-mineral                properties & equipment               |   |                                       |   |   |                                       |   |   |                                                                                     |   |   | 2,286,576 |   |
|                                                                                    |   |                                       |   |   |                                       |   |   |                                                                                     |   |   |   |   |
|      Common                Stock issued for mineral properties |   |                                       |   |   |                                       |   |   |                                                                                     |   |   | 1,198,075 |   |
|                                                                                    |   |                                       |   |   |                                       |   |   |                                                                                     |   |   |   |   |
|      Common                Stock issued for equipment          |   |                                       |   |   |                                       |   |   |                                                                                     |   |   | 1,297,718 |   |
|   Common                Stock issued to acquire Xenolix assets                |   |                                       |   |   |                                       |   |   |                                                                                     |   |   |   |   |
|   net                of $25,000 expensed $1,162,792 Xenolix patents and       |   |                                       |   |   |                                       |   |   |                                                                                     |   |   |   |   |
|   technologies                $109,978 capitalized as equipment               |   |                                       |   |   |                                       |   |   |                                                                                     |   |   | 1,272,790 |   |
|                                                                                    |   |                                       |   |   |                                       |   |   |                                                                                     |   |   |   |   |
|                                                                                    |   |                                       |   |   |                                       |   |   |                                                                                     |   |   |   |   |
| Cancellation                of shares issued to Xenolix                                 |   |                                       |   |   |                                       |   |   |                                                                                     |   |   | - |   |
|    Equipment                returned to satisfy debt , payables          |   |                                       |   |   |                                       |   |   |                                                                                     |   |   | 1,299,872 |   |
|      Interest                Paid                              |   |                                       |   |   |                                       |   |   |                                                                                     |   |   | 68,851 |   |
|                                                                                    |   |                                       |   |   |                                       |   |   |                                                                                     |   |   |   |   |
|      Income                Taxes Paid                          |   |                                       |   |   |                                       |   |   |                                                                                     |   |   | 4,078 |   |
|                                                                                    |   |                                       |   |   |                                       |   |   |                                                                                     |   |   |   |   |
|                                                                                    |   |                                       |   |   |                                       |   |   |                                                                                     |   |   |   |   |
| See                accompanying notes to the financial statements                       |   |

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| EXHIBITS                   |
|----------------------------|
|                            |   |  |
| Exhibit                No. |   | Description |
| 31.1                       |   | Rule                  13a-14(a)/15d-14(a)                  Certifications |
|                            |   |  |
| 32.1                       |   | Certification                  under Section 906 of the Sarbanes-Oxley Act (18 U.S.C.                  1350) |

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| Date:                 March 14, 2008 |  |                                                                                       |
|-------------------------------------------|--|---------------------------------------------------------------------------------------|
|                                           |  |                                                                                       |
|                                           |  | FRANKLIN                LAKE RESOURCES INC.                                           |
|                                           |  |         (Registrant)                          |
|                                           |  |                                                                                       |
|                                           |  | By                /s/ Father Gregory                Ofiesh                       |
|                                           |  |    Father                Gregory Ofiesh                                |
|                                           |  |    President                and                Chief Executive Officer |

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